11/15/2014 - Financial Repression: Central Banks & ‘Officials’ Will Force Banks To Buy More Government Bonds
Just as the Federal Reserve has stopped its quantitative easing program, the Bank of Japan stepped up to the plate to take over the bond buying .. now the New York Times reports that the Financial Stability Board, a panel made up of central bankers, finance officials & top regulators from the world’s largest economies, announce proposals this week that would double the amount of money that large banks would be required to have on hand to absorb losses .. the idea minimizes the possibility of governments to have to bail out their banks, plus makes banks buy government bonds at the same time – a double whammy to help governments with their debt & deficit burdens [Cliff Note: They call it ‘financial repression’. We think it would be more honest to call it ‘exploitation’ … Words can affect perception & make reality seem more innocent than it is. As an expression, ‘financial repression is similar to the expression ‘Quantitative Easing’ .. which sounds innocent until you call it for what it really is: creating new money from thin air for the benefit of those who are in control of the money system.] .. “The new rules would require global systemically important banks to hold twice as much capital, 6%, as required by the Basel III rules. In addition, banks would be required to have capital equal to at least 16 percent and as much as 20% of their outstanding loans, derivatives portfolios and other assets, after adjusting for risk. Part of this capital could be borrowed from investors who would earn interest, but would lose their money if the bank got into trouble. Combined with the impact of other new regulations, the rules would require banks to increase their capital to 25% of assets adjusted for risk.” .. the article emphasizes bank lobbyists will push back vigorously on these proposals.
